(Xinhua)
Updated: 2008-01-09 13:55

China gold futures contracts surged to the daily 10 percent limit on Wednesday, minutes after the official debut trading started at 9 a.m. on the Shanghai Futures Exchange (SFE).

Seven contracts were trading, with the benchmark price set at 209.99 yuan (28.8 U.S. dollars) per gram by the SFE a day earlier, at a level lower than world gold prices.

The key contract for June delivery was the first to climb 9.98 percent to 230.95 yuan per gram, followed by the daily limit surges of other contracts for July-to-December delivery.

The contract size was set at 1,000 grams, larger than the originally expected 300 grams, to discourage individual investors who lacked the ability to take risk.

Trading was from 9 a.m. to 11:30 a.m. and from 1:30 p.m. to 3 p.m. Beijing time each weekday.

The SFE said earlier it would impose strict risk controls on gold futures. It would also set a minimum margin requirement of seven percent of the contract value.

Analysts believed investors would need at least 24,000 yuan to secure a futures contract, as most futures brokers would ask for a 12 percent cash deposit for each contract.

China's gold futures trading was launched at a time when international gold prices have repeatedly been hitting new highs.

Gold prices climbed more than two percent on Tuesday against strong oil prices and a weakening U.S. currency. A troy ounce of gold for February delivery added 18.30 U.S. dollars to settle at 880.30 U.S. dollars on the New York Mercantile Exchange.

Shang Fulin, China Securities Regulatory Commission (CSRC) chairman, stressed the financial nature of the precious metal and called for "joint efforts for the stable operation" of the new futures product at the launch ceremony in Shanghai.

China was the world's third largest gold producer, and the country's gold consumption in the manufacturing sector was about 9.2 percent of the global total, according to Shang.

The CSRC approved the launch of gold futures trading last month. Gold was the fifth new futures products approved in 2007 after zinc, rapeseed oil, polyethylene and palm oil.

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